A MODEL COMPANY-LEVEL CORPORATE GOVERNANCE CODE
APPROVED
By decision of the General Meeting of Shareholders
of the Open Joint Stock Company «__________________»
Supervisory Board Minutes
No. ______________________________
of _____________ 200_
Signature of the Chairman of the GMS
______________________________
dated this __day of ________, 200_
[The Company’s Seal]
CORPORATE GOVERNANCE CODE
of the Open Joint Stock Company
«______________________»
The city of __________
______________, 200_
Table of Contents
PREAMBLE
BACKGROUND AND PROFILE
PART I. COMMITMENT TO CORPORATE GOVERNANCE
1. Definition and Principles.
2. Internal Corporate Documentation
3. General Governance Structure
4. Compliance with and Adherence to Corporate Governance
PART II. GOOD BOARD PRACTICES
1. At the Supervisory Board Level
2. At the Executive Body Level
3. Interaction Between the Supervisory Board and Executive Bodies and the Role of
the Corporate Secretary [if established]
PART III. SHAREHOLDER RIGHTS
1. General Meetings of Shareholders
2. (Minority) Shareholder Rights Protection
3. Related Party Transactions
4. Dividend Policy
PART IV. INFORMATION DISCLOSURE AND TRANSPARENCY
1. Disclosure Policies and Practices
2. Financial Reporting
3. Internal Audit and Control
4. The External Audit
5. Ownership Structure
2
Preamble
The purpose of this Company Code of Corporate Governance (hereinafter the Company
Code) is to improve and systematize the governance of the Open Joint Stock Company
«__________» (hereinafter the Company), make its governance more transparent, and
demonstrate the Company’s commitment to good corporate governance by developing and
furthering:
• Responsible, accountable, and value-based performance management;
• Effective oversight, with executive bodies that act in the best interests of the
Company and its shareholders, including minority shareholders, and seek to enhance
shareholder value in a sustainable manner; and
• Appropriate information disclosure and transparency, as well as an effective system
of risk management and internal control.
By adopting, following, and updating the Company Code, the Company’s charter, and bylaws on a regular basis, the Company confirms its desire to demonstrably lead and promote
good corporate governance. To foster the confidence of its shareholders, employees,
investors, and the general public, the Company Code goes beyond the established legal and
regulatory framework in Russia today, and embraces both national and internationally
recognized corporate governance principles and practices.
The Company’s governing bodies and employees understand this Company Code as their
joint obligation, and accordingly, obligate themselves to ensure that its provisions and its
spirit are adhered to and acted upon throughout the Company [and its subsidiaries and
dependent companies].
Background and Profile
The Company’s mission is to ________________________. Its objectives are to
__________________, ___________________, and _______________________.1
The Company operates in the following business sectors: ______________. It operates in
the following regions: __________, ____________, and ________, as well as countries:
_________________, __________________ and __________________.
The Company is publicly listed on the _____________ exchange.
1
This section is intended to provide an overview of the company’s mission, objectives, and main areas of
activity. It may also include other areas that may be of interest to the readers of the Company Code that will
enable them to gain a broad understanding of the company, its business, geographical location, and rationale
for drafting the Company Code.
3
Part I. Commitment to Corporate Governance
1. Definition and Principles
The Company defines corporate governance as a set of structures and processes for the
direction and control of companies, which involves a set of relationships between the
Company’s shareholders, Supervisory Board, and executive bodies with the purpose of
creating long-term shareholder value. It views corporate governance as a means to improve
operational efficiency, attract financing at a lower cost, and build a better reputation. It also
views a sound system of governance as an important contribution to the rule of law in the
Russian Federation, and an important determinant of the role of the Company in a modern
economy and society.
The Company Code sets out the Company’s corporate governance framework and is based
on Russian legislation, the Federal Commission for the Securities Market’s Code of
Corporate Conduct (FCSM Code), as well as internationally recognized best practices and
principles, such as the OECD Principles of Corporate Governance.
The Company’s corporate governance framework is based on the following principles:
• Accountability: This Company Code establishes the Company’s accountability to
all shareholders and guides the Company’s Supervisory Board in setting strategy, and
guiding and monitoring the Company’s management.
• Fairness: The Company obligates itself to protect shareholder rights and ensure the
equitable treatment of all shareholders, including minority [and foreign] shareholders.
All shareholders are to be granted effective redress for violation of their rights
through the Supervisory Board [or a shareholder rights committee, if established].
• Transparency: The Company is to ensure that timely and accurate disclosure is
made on all material matters regarding the Company, including the financial
situation, performance, ownership, and governance of the Company, in a manner
easily accessible to interested parties.
• Responsibility: The Company recognizes the rights of other stakeholders as
established by laws and regulations, and encourages co-operation between the
Company and stakeholders in creating sustainable and financially sound enterprises.
The Company, its key officers and all employees act in accordance with all applicable laws
and regulations, and, furthermore, shall comply with ethical standards of business conduct
as defined by this Company Code, the FCSM Code and ___________________ [name
other source of ethical standards].
2. Internal Corporate Documentation
This Company Code is principle-based. More specific corporate governance structures,
processes, and practices are regulated in the Company’s charter and the by-laws for the:
• General Meeting of Shareholders (GMS);
• Supervisory Board;
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• Executive bodies;
• The Audit Commission; and
• ___________________________.2
This set of internal corporate documents follows legal and regulatory requirements, and
incorporates the main provisions of the FCSM Code and internationally recognized
corporate governance practices. The above-mentioned corporate documents are published
on the Company’s website.
3. General Governance Structure
The Company has the following governing and other bodies:
• The General Meeting of Shareholder. The highest governing body of the
Company allows the shareholders to participate in the governance of the Company;
• The Supervisory Board is responsible for the strategic direction of the Company,
and the guidance and oversight of management; [the Company’s Supervisory Board
may also establish committees on audit, corporate governance, nominations and
remuneration, strategic planning and finance];
• The General Director and the Executive Board carry out the day-to-day
management of the Company and implement the strategy set by the Supervisory
Board and shareholders;
• The Revision Commission oversees the financial and economic activities of the
Company and reports directly to the GMS;
• The Corporate Secretary ensures that the governing bodies follow internal rules
and external regulations to facilitate clear communications between the governing
bodies, and acts as an adviser to directors and senior executives;
• The Internal Auditor develops and monitors internal control procedures for the
business operations of the Company. The Internal Auditor reports directly to the
Supervisory Board [through the Audit Committee], and reports administratively to
the General Director.
4. Compliance with and Adherence to Corporate Governance Policies and Practices
The Company’s _________________ is responsible for ensuring the development of,
compliance with, and periodic review of corporate governance policies and practices in the
Company.3
2
Best practice calls for additional by-laws for the Corporate Secretary; for all Supervisory Board committees
established; on internal control; on the company’s dividend policy; on risk management; on information
disclosure and transparency; and on corporate governance policies in groups of companies. The company may
also wish to draft a company code of ethics.
3
Good practice suggests that the Corporate Secretary develop and the Supervisory Board’s Corporate
Governance Committee approve these policies.
5
Part II. Good Board Practices
The Company views a vigilant, professional, and independent Supervisory Board as
essential for good corporate governance. The Supervisory Board cannot substitute for
talented professional managers, nor change the economic environment in which the
Company operates. It can, however, influence the performance of the Company through its
supervision, guidance, and control of management in the interests and for the benefit of the
Company’s shareholders. Executive bodies also play a crucial role in the governance
process. The effective interaction between governing all bodies, and a clear separation of
authorities is key to sound corporate governance.
1. At the Supervisory Board Level
a. Authority. The Supervisory Board’s scope of authority is set forth in the Company’s
charter, in conformity with relevant legislation and the recommendations of the FCSM
Code.
b. Size. The Supervisory Board [upon the recommendation of its corporate governance
committee, if established] recommends the appropriate size of the Supervisory Board. The
Supervisory Board’s size is fixed in the Company’s charter. Achieving the needed quality
and mix-of-skills will be the primary consideration in arriving at the overall number.
c. Election, Term, and Dismissal. Directors are elected for a one-year term. The Company
uses cumulative voting to elect its directors.
The Supervisory Board does not believe it is in the best interests of the Company or its
shareholders to introduce term limits. Experienced directors, familiar with the Company
and the industry in which it operates, are key to providing proper guidance.
The GMS may only dismiss all directors. Grounds for dismissal are included in the
Company’s charter [or by-law for the Supervisory Board].
d. Composition and Independence. The composition of the Supervisory Board is
determined in such a way that combines the representatives of various shareholder groups,
including minority shareholders.
The Supervisory Board’s composition, competencies, and mix-of-skills are adequate for
oversight duties, and the development of the Company’s direction and strategy. Each
individual director has the experience, knowledge, qualifications, expertise, and integrity
necessary to effectively discharge Supervisory Board duties and enhance the Board’s
ability to serve the long-term interests of the Company and its shareholders. The
Supervisory Board has a broad range of expertise that covers the Company’s main business,
sector, and geographical areas, and includes at least ______ experienced financial experts
who are non-executive, independent directors.4 A full and complete set of information on
the directors’ qualifications is set forth and annually reviewed by the Supervisory Board
4
Good practice suggests that the Supervisory Board consist of at least two such persons. Should this not be
possible, then the Supervisory Board shall hire an outside, independent adviser.
6
[upon the recommendation of its corporate governance committee] and fixed in the
Company’s charter or by-laws.
The law prohibits the General Director from being the Chairman of the Supervisory Board.
To enhance unbiased oversight, the Company believes that a non-executive director should
chair the Supervisory Board.
The Company’s Supervisory Board is composed of not more than 25% of executive
directors who are employees of the Company. To ensure the impartiality of decisions and to
maintain the balance of interests among various groups of shareholders, __ [number or
percentage] of the Supervisory Board’s members are independent directors. The Company
defines those directors who have no material relationship with the Company beyond their
directorship as independent. The Supervisory Board ascertains which members are to be
deemed independent during the first Supervisory Board meeting. Criteria for determining
director independence shall be based on the FCSM Code, complemented by other
internationally recognized definitions, and specified in the Company’s charter and annual
report.
The Company recognizes that directors that have served for longer than seven years shall
not be considered independent directors.
e. Structure and Committees. The Company has established the following Supervisory
Board committees:
• The Audit Committee;
• ___________________________;
• ___________________________; and
• Other committees deemed necessary by the Supervisory Board.5
All committees have by-laws containing provisions on the scope of authority,
competencies, composition, working procedures, as well as the rights and responsibilities
of the committee members.
Each committee is to provide provisional consideration of the most important issues that
fall within the authority of the Supervisory Board. After each of its meetings, the committee
shall report on the meeting to the Supervisory Board.
f. Working Procedures. The Supervisory Board meets according to a fixed schedule, set at
the beginning of its term, which enables it to properly discharge its duties. As a rule, the
Supervisory Board shall meet at least __ times a year.6
Non-executive directors meet separately from executive members at least once a year.
5
Other Supervisory Board committees recommended by the FCSM Code and generally-accepted best
practices cover areas in which there is an especially large potential for conflicts of interest and the need for
independent thought, in particular, the nominations and remuneration committee. Companies may eventually
wish to consider adding further committees on corporate governance, strategic planning and finance,
shareholder rights, ethics, and/or corporate conflicts resolution. However, companies should be prudent in the
establishment of committees. Excessive numbers of committees may be costly, difficult to manage, and may
fragment Board deliberations.
6
Good practice suggests that four to ten Supervisory Board meetings per year are sufficient to properly
discharge the Board’s duties.
7
Detailed procedures for calling and conducting Supervisory Board meetings are defined in
the Supervisory Board’s by-law. All directors are provided with a concise but
comprehensive set of information [by the Corporate Secretary] in a timely manner,
concurrently with the notice of the Board meeting, but no less than ____ days before each
meeting.7 This set of documents is to include: an agenda; minutes of the prior Board
meeting; key performance indicators, including relevant financial information prepared by
management; and clear recommendations for action.
The Supervisory Board keeps detailed minutes of its meetings that adequately reflect Board
discussions, signed by the Chairman [and the Corporate Secretary], and include voting
results on an individual basis. The Company keeps transcripts (verbatim reports) of
important Board decisions, such as the approval of extraordinary transactions.
g. Self-Evaluation. The Supervisory Board conducts a yearly self-evaluation. This process
is to be organized by ______________ [e.g. the corporate governance committee] and the
results are to be discussed by the full Supervisory Board. Independent consultants may also
be invited to assist the Supervisory Board in this process.
h. Training and Access to Advisers. The Company offers an orientation program for new
directors on the Company, its business, and other issues that will assist them in discharging
their duties. The Company also provides general access to training courses to its directors
as a matter of continuous professional education. The Supervisory Board and its
committees shall also have the ability to retain independent legal counsel, accounting, or
other consultants to advise the Supervisory Board when necessary.
i. Remuneration. The remuneration of non-executive directors is competitive and is
comprised of an annual fee (part of which can be paid in the form of shares in lieu of cash),
a meeting attendance fee, and an additional fee for the chairmanship of committees or the
Supervisory Board itself. The remuneration package shall, however, not jeopardize a
director’s independence. Executive directors are not paid beyond their executive
remuneration package. The Supervisory Board [nominations and remuneration committee]
periodically reviews the remuneration paid to directors. All directors sign a contract with
the Company. The Company publicly discloses the remuneration of each director on an
individual basis.
The Company will not provide personal loans or credits to its directors.
Further, the Company shall not provide stock options to its directors unless approved by the
GMS.
j. Duties and Responsibilities. Directors act in good faith, with due care and in the best
interests of the Company and all its shareholders — and not in the interests of any
particular shareholder — on the basis of all relevant information. Each director is expected
to attend all Supervisory Board and applicable committee meetings.
The Supervisory Board must decide as to whether its directors can hold positions in the
governing bodies of other companies. The Company shall not prohibit its directors from
serving on other Supervisory Boards. Directors are expected to ensure that other
commitments do not interfere in the discharge of their duties.
7
Good practice suggests around two weeks.
8
Directors shall not divulge or use confidential or insider information about the Company.
Directors shall abstain from actions that will or may lead to a conflict of interest with the
Company. When such a conflict exists, directors shall disclose information about the
conflict of interests to the other directors and shall abstain from voting on such issues.
2. At the Executive Body Level
The Company understands that the day-to-day management of the Company requires strong
leadership from the General Director. It also recognizes the challenge and complexity of
running a Company and believes in teamwork, a collective rather than individual approach.
The Company has thus established an Executive Board, chaired by the General Director.
a. Authority. The General Director and the Executive Board carry out the Company’s dayto-day management, implementing its goals and objectives, and carrying out its strategy.
b. Size. The General Director [in close cooperation with the nominations and remuneration
committee, if established] proposes to the Supervisory Board an appropriate number of
Executive Board members. The size of the Executive Board is fixed in the Company’s
charter upon the recommendation of the Supervisory Board. Achieving the needed quality
and mix of executives will be the primary consideration in arriving at the overall number.
c. Election, Term, and Dismissal. The Supervisory Board [or the GMS] elects the General
Director for a ______ year term.8 The General Director in turn submits proposals for
Executive Board membership to the Supervisory Board for approval. Other Executive
Board members are appointed for a _____ year term.
The Supervisory Board may dismiss the General Director. The Supervisory Board may also
dismiss Executive Board members, upon close coordination with the General Director.
Grounds include, among other things, providing false information to the Supervisory
Board, willful neglect of his duties and responsibilities, or conviction of a criminal act.
d. Composition. The Executive Board’s composition, competencies, and mix-of-skills are
suited to the effective and efficient running of the Company’s day-to-day operations. Each
Executive Board member, including the General Director, has the experience, knowledge,
qualifications, and expertise necessary to effectively discharge his duties.
All Executive Board members have the:
• Trust of the Company’s shareholders, directors, other managers, and employees;
• Ability to relate to the interests of all shareholders and to make well-reasoned
decisions;
• Professional expertise and education to be an effective manager;
• Business experience, knowledge of national issues and trends, and knowledge of the
market, products, and competitors; and
8
Good practice suggests that the Supervisory Board elect the General Director and the other Executive Board
members upon the recommendation of the General Director. The IFC’s RCGP recommends a term ranging
from three to five years, following an initial one-year term.
9
• Capacity to translate knowledge and experience into solutions that can be applied to
the Company.
e. Working Procedures. The Executive Board meets regularly, and agenda issues are
communicated in advance. The working procedures of the Executive Board are specified in
the by-laws for the Executive Board.
f. Succession Planning. The Supervisory Board is to adopt a succession plan that outlines
how it will effectively deal with the temporary or permanent loss of senior executives. To
assist in this process, the General Director is to provide the Supervisory Board with a list of
individuals best suited to replace the Company’s key executives, including the position of
the General Director.
g. Remuneration and Evaluation. The amount of remuneration of the General Director
and members of the Executive Board is set by the Supervisory Board, and approved by the
GMS. The remuneration shall have a fixed and variable component, and the latter is tied to
key performance indicators, in-line with the input into the Company’s long-term
development and creation of shareholder value. The Company will not provide personal
loans or credits to its executive officers.
h. Duties and Responsibilities. The General Director and Executive Board members shall
act in good faith and with due care in the best interests of the Company and all its
shareholders — and not the interests of a particular shareholder — on the basis of all
relevant information.
The General Director and Executive Board members shall abstain from actions that will or
may lead to a conflict between their and the Company’s interests. When such a conflict
exists, members of the executive bodies shall disclose information about the conflict of
interests to the Supervisory Board, and shall abstain from deliberating and voting on such
issues.
3. Interaction Between the Supervisory Board and Executive Bodies and the Role of
the Corporate Secretary
Good corporate governance provides for an open dialogue between the Company’s
Supervisory Board and executive bodies. The Company has thus developed a procedure for
periodic reports (information briefs) of the General Director and Executive Board to the
Supervisory Board, as specified in the Executive Board’s by-law. The Supervisory Board
shall further have unrestricted access to the Company’s management and its employees.
The Corporate Secretary plays a key, overall role in facilitating this process.
The Company’s Corporate Secretary is employed on a full-time basis. The Corporate
Secretary possesses the necessary qualifications and skills to ensure that the governing
bodies follow internal rules and external regulations; facilitates clear communications
between the governing bodies in-line with the Company’s charter, by-laws, and other
internal rules; and keeps the Company’s key officers abreast of the latest corporate
governance developments.
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Part III. Shareholder Rights
All shareholders have the right to participate in the governance and the profits of the
Company. All rights are regulated in the Company’s charter and by-laws.
1. General Meetings of Shareholders
The Company has a by-law for the GMS that provides a detailed description of all the
procedures for preparing, conducting, and making decisions at the GMS.
a. Preparation. Every shareholder that holds voting shares is entitled to participate and
vote during the GMS, and receive advance notification, an agenda, as well as accurate,
objective, and timely information sufficient for making an informed decision about the
issues to be decided at the GMS. The Company’s executive bodies will be responsible for
this process, which is to be implemented by the Corporate Secretary.
The Company has a fair and effective procedure for submitting proposals to the agenda of
the GMS, including proposals for the nomination of Supervisory Board members. The
agenda of the GMS is not changed after the Supervisory Board approves it.
b. Conducting the GMS. The Company takes all the steps necessary to facilitate the
participation of shareholders in the GMS and vote on the agenda items.
The venue of the GMS is easily accessible for the majority of shareholders. Registration
procedures are convenient and allow for quick and easy admittance to the GMS.
The Company’s executive bodies are to help shareholders exercise their voting rights in the
event they are unable to physically attend the GMS. The executive bodies will do so by
providing shareholders with a power of attorney form, based upon which the shareholder
will have an opportunity to instruct his proxy on how to vote on agenda items.
The Company ensures that members of the Supervisory Board, executive bodies, Revision
Commission, and External Auditor are present during the GMS to answer questions. Each
shareholder has the right to take the floor on matters on the agenda, and submit relevant
proposals and questions. The chairman of the GMS conducts the meeting professionally,
fairly, and expeditiously.
Voting is conducted by ballot. The Company has effective shareholder voting mechanisms
in place (e.g. super-majority voting) to protect minority shareholders against unfair actions,
as regulated in its charter and by-law for the GMS. The procedures for counting votes at the
GMS are transparent and exclude the possibility of manipulating voting results. The
External Registrar of the Company shall also fulfill the functions of the Counting
Commission.
c. Results. The voting results and other relevant materials are distributed to shareholders,
either at the end of the GMS or very soon after the GMS is held, as well as to the general
public by posting them on the Company’s internet site and publishing them in the mass
media in a timely manner.
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2. (Minority) Shareholder Rights Protection
The Company has a system of registering shareholder complaints and effectively regulating
corporate disputes [through the Supervisory Board’s shareholder relations committee].
a. Supervisory Board representation. Minority shareholders have __ [number]
identifiable representatives on the Supervisory Board.9
b. External Registrar. The Company engages an independent External Registrar to
maintain the shareholder register. The Company ensures a reliable and efficient ownership
registration system of shares and other securities through the selection and appointment of
an independent External Registrar that has proper technical equipment and an excellent
reputation.
c. Takeover policy. The Company has a clearly articulated and enforceable policy in place
that protects the rights of minority shareholders in special circumstances, such as a change
of control.
3. Related Party Transactions
The Company avoids related party transactions. When this is not possible, the Company
discloses all relevant information on related party transactions including information on the
affiliated parties and the affiliation of directors and members of other governing bodies.
4. Dividend Policy
The Company has formally developed and follows a written dividend policy. This dividend
policy is publicly disclosed on the Company’s website.
The procedure for determining the amount of dividends on preferred shares does not violate
other shareholder rights. The Company’s dividend policy:
• Establishes a transparent, understandable, and predictable mechanism for
determining the amount of the dividends;
• Ensures that the dividend payment procedure is easy and efficient; and
• Provides for the complete and timely payment of declared dividends.
9
Good practice suggests that the Supervisory Board’s composition reflect the shareholding structure, but that
the Supervisory Board have at least one identifiable minority shareholder representative.
12
Part IV. Information Disclosure and Transparency
Transparency, and timely and accurate information disclosure is a key corporate
governance principle for the Company.
1. Disclosure Policies and Practices
The Company discloses and provides easy access to all material information, including the
financial situation, performance, ownership, and the governance structure of the Company
to shareholders free of charge. The Supervisory Board prepares and approves a by-law on
information disclosure and makes it publicly available on the Company’s internet site. The
Company publishes a comprehensive annual report that includes a corporate governance
section, and prepares other reports, such as the prospectus, quarterly reports, and material
facts reports. The Company discloses its corporate governance practices, corporate events
calendar, and other material information on its website in a timely manner.
The Company takes measures to protect confidential information as defined in its by-law
on information disclosure. Any information obtained by the Company’s employees and the
members of the governing bodies may not be used for their personal benefit.
2. Financial Reporting
The Company keeps records and prepares a full set of financial statements in accordance
with Russian Accounting Standards. [In addition, the Company prepares its accounts in
accordance with International Financial Reporting Standards (IFRS) [or U.S. GAAP] and
discloses these in its regulatory filings, including the annual report, and on the internet.]
Detailed notes accompany financial statements so that the users of the statements can
properly interpret the Company’s financial performance. A management discussion and
analysis (MD&A), as well as the opinions of the External Auditor and Revision
Commission, shall complement all financial information.
[The company produces consolidated accounts when required by accounting standards.]
3. Internal Audit and Control
a. The Revision Commission. The Company’s Revision Commission is to meet at least __
[number] times a year to carry out its duties as specified by law and its by-laws. The
Revision Commission shall consist of independent members, of which at least __ [number]
members are experienced financial experts. Its scope of authority and activity goes beyond
legislative requirements.10
10
Supervisory Board audit committees are becoming increasingly common internationally. Good practice
suggests that the Company strengthen the role of the Supervisory Board’s Audit Committee and make sure
that it complements the functions of the Revision Commission. Good practice suggests that the Revision
Commission meet at least four times per year, and that it be composed of at least one financially literate
member.
13
b. The Internal Auditor. The Company has an Internal Auditor [or office of the Internal
Auditor] that is responsible for the daily internal control of the Company’s finances and
operations. The Internal Auditor is staffed by a highly respected and reputable person[s],
and reports to the Supervisory Board [or Audit Committee] functionally and to the General
Director administratively.11 The Internal Auditor’s authority, composition, working
procedures, and other relevant matters are regulated in its by-law.
c. The Supervisory Board’s Audit Committee. The Audit Committee is to focus on three
key areas: financial reporting, risk management, and internal and external audit. This
committee is to be chaired by an independent director and composed of non-executive
directors, each of which is recognized for his or her financial literacy. Its exact authority,
composition, working procedures, and other relevant matters are regulated in its by-laws.
4. The External Audit
An External Auditor audits the Company’s financial statements. The External Auditor is a
publicly recognized independent auditing firm, where independent means independence
from the Company, the Company’s management, and major shareholders. The Company
ensures that the Audit partner is periodically rotated. The remuneration of the auditor is
disclosed to shareholders. The External Auditor is selected by the GMS following an open
tender and upon the recommendation of the Supervisory Board.
5. Ownership Structure
The Company ensures that beneficial owners of five percent or more of the voting shares
are disclosed. Any corporate relations in case of groups of companies are also clearly
identifiable and disclosed to the public.
11
Good practice suggests that the Internal Auditor be a member of the Institute of Internal
Auditors (see also: http://www.iia-ru.ru).
14